On May 19, Li Keqiang presided over an executive meeting of the State Council to make arrangements to ensure the supply of bulk commodities and stabilize prices. Among them, my country's key coal enterprises are required to increase production and supply under the premise of ensuring safety, increase the output of wind power, photovoltaic, hydropower, and nuclear power, and do a good job of ensuring energy during the peak summer. At the same time, it is necessary to strengthen the joint supervision of the commodity futures and spot market, investigate abnormal transactions and malicious speculation, and strictly investigate price drive ups, especially hoarding, etc. according to the law. The policy has begun, commodity prices have fallen sharply, and the price of thermal coal futures traded by Zhengzhou Commercial Exchange has reached a limit. We believe that regulatory policies will not only affect future supply, but also curb speculative demand, which will cause coal prices to continue to fall in the short term.

The place of origin actively guarantees supply and reduces prices

In order to alleviate the current tight coal supply situation, the relevant departments in the Ordos region of Inner Mongolia recently held a meeting to study countermeasures to ensure the increase in supply. At the same time, in order to implement the task of guaranteeing supply, Shaanxi Coal Group fulfilled the long-term agreement and proposed to suspend the sale of coal for local sales and increase the direct railway delivery to users of coal cars. In addition, at the recent supply guarantee meeting, it was even more important to speed up the recovery of production from shutdown mines for maintenance, actively release production capacity, and increase railway shipments, so as to contribute to the overall national energy supply and price stability in the near future.

On May 19, 15 departments including the Yulin Municipal Market Supervision Bureau, the Municipal Development and Reform Commission, and the Municipal Energy Bureau intensively interviewed the person in charge of coal enterprises on curbing the phenomenon of excessive coal prices; all coal enterprises were required to actively adapt to the law of price operation and reasonably control coal. Price, it is strictly forbidden to drive up the price of coal, such as driving up the price, hoarding and so on.

Indonesia's Ramadan has passed, thermal coal imports will rise

According to statistics from the Bureau of Statistics, the coal imported in April was 21.73 million tons, down 29.8% year-on-year. From January to April, my country's coal imports decreased by 28.8% year-on-year. my country’s low power imports this year is mainly due to the fact that international thermal coal prices have maintained an upward trend as a whole, driven by the recovery of the overseas economy. This has led to the weakening of the price advantage of imported coal and even a short-term domestic and foreign price inversion, which makes imports less profitable. The volume of imports fell. At the same time, the deterioration of Sino-Australian relations caused the suspension of Australian coal imports and the Indonesian Ramadan from April 13 to May 13 leading to a further sharp drop in coal imports. However, after May 13th, the month of Ramadan in Indonesia ended, and Indonesian coal production and outbound transportation returned to normal; while the severe epidemic in India and the declining coal demand led to a decrease in Indian imports, some Indonesian resources may flow to my country. In the future, steam coal imports will appear month-on-month. increase.

Short-term speculative disk releases supply, and downstream peak power consumption is opened to reduce demand

Regulatory policies have affected market expectations, and coal transportation, production and marketing companies have responded to the call and voluntarily lowered coal prices. This has further aroused fear of stockpiling traders. In addition, the overall industrial product plummeted, prompting coal prices to enter a downward pattern. With the support of policies, coastal power plants have also changed their previous anxious mentality. In the case of high coal prices, they have adopted the strategy of slow purchase and slow purchase, which has caused traders and platforms and other hoarding institutions to sell goods and lock profits in the short term. Power plants and other end consumers are buying up and not buying down, short-term supply increases and demand decreases, and coal prices further fall.

At the same time, the National Development and Reform Commission held a downstream meeting to talk about areas with severe energy-saving situations, requiring these areas to start off-peak electricity consumption in advance. Affected by the severe impact of the alternating dry seasons and the severe power supply and demand situation during the peak summer period, Guangdong, Foshan, Zhuhai and other places have opened up shifting power consumption in advance. The cycle is expected to last 3 months. This "demand stabilization and demand reduction" measure is based on demand. The terminal alleviated the shortage of electricity and coal supply.

In summary, the regulatory policies have changed the market expectations of both the supply and demand sides, and measures such as ensuring the supply and lowering prices of production areas and reducing downstream demand will cause coal prices to fall in the short term.